Instant Reaction: Jay Powell on the Fed Decision

Bloomberg Surveillance

Bloomberg

Business News, News, Investing, Business

3.8 • 1.2K Ratings

🗓️ 7 May 2025

⏱️ 30 minutes

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Summary

Bloomberg's Tom Keene, Jonathan Ferro and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.

Federal Reserve Chair Jerome Powell said officials are not in a hurry to adjust interest rates, adding tariffs could lead to higher inflation and unemployment. “If the large increases in tariffs that have been announced or sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment,” Powell said Wednesday at the conclusion of a two-day meeting in Washington. “The effects on inflation could be short lived, reflecting a one time shift in the price level,” he said. But it’s “also possible that the inflationary effects could instead be more persistent.”

Officials voted unanimously to keep the benchmark federal funds rate in a range of 4.25% to 4.5%, where it has been since December. In a statement, policymakers said they see a growing risk of both higher inflation and rising unemployment. “Uncertainty about the economic outlook has increased further,” the Federal Open Market Committee said in a statement. They added, “the risks of higher unemployment and higher inflation have risen.”

The S&P 500 index of US stocks and Treasury yields fell following the announcement, while the dollar pared gains.

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0:00.0	Hi, I'm Lisa Mateo, introducing you to the new Stockmovers report from Bloomberg.
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1:02.0	Bloomberg Audio Studios, Podcasts, Radio News.
1:08.6	This is a breaking news update from Bloomberg.
1:12.9	Instant reaction and analysis from our 3,000 journalists and analysts around the world.
1:19.3	The chairman of the Federal Reserve wrapping up the main news conference, the press doing their
1:22.9	best to make that interesting, the chairman doing his best to make it boring.
1:26.5	And I think he was fairly
1:27.7	successful. Your equity market this afternoon looks like this. Equity is positive by just a tenth of
1:32.3	1% on the S&P 500 in the bond market on a two-year, 10-year, 30-year. We look like this. On a 10-year
1:38.0	maturity yields lower by a single basis point, 42791. The risks have risen. The risks have
1:43.7	not materialized. The Fed Chair J. Powell says
1:46.0	we're well positioned to wait. We don't think we need to be in a hurry. We think we can be patient.
1:52.0	We're in a good position to wait and see is the thing. We don't have to be in a hurry. The economy has been resilient and is doing fairly well.
1:59.0	Our policy is well positioned. The costs of waiting to see further are fairly low.
	...

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